New Delhi, June 17 (IANS) Thailand on Friday said it would further facilitate investments by Indian firms in the Southeast Asian nation and resolved to increase Thai investments into India, following the first meeting of the India-Thailand Joint Business Forum here during the ongoing visit of Thai Prime Minister General Prayut Chan-o-cha.

“I am ready to waive rules that are obstacles so as to facilitate Indian business. Thailand would like Indian investors to come and invest in our priority sectors like information technology, pharmaceuticals, auto-components, and machinery,” General Chan-o-Cha told a gathering of business leaders from both countries at an event here hosted jointly by the three industry chambers FICCI, CII and Assocham.

“Besides, there are many opportunities for Indian business in the wider Asean (Association for Southeast Asian Nations) region. Thailand can be like a forward base for Indian investors to Asean,” the Thai Prime Minister, who is on a visit to India, said.

The Thailand Prime Minister, who held delegation level talks with Prime Minister Narendra Modi earlier in the day, invited Indian investments under the country’s cluster development policy.

The joint statement issued after the talks said that both sides will also be renegotiating a new bilateral investment treaty.

The India-Thailand Joint Business Forum has recommended a target of doubling bilateral trade from the current $8 billion level to $16 billion in the next five years. Following its first meeting the forum said it would explore trade in new products and services.

In a bid to attract more tourists from Thailand, India on Friday announced that it will facilitate double entry e-tourist visas for Thai citizens.

Thailand is also interested in development of the Buddhist tourist circuit in India, Chan-o-Cha told the business meeting.

Asian stocks outside Japan dropped, with the regional gauge on course for the longest losing streak in almost five months, amid global economic growth concerns.

The MSCI Asia Pacific excluding Japan Index slid 0.3% to 406.11 as of 4:10pm in Hong Kong, the lowest level since April 8. A report Wednesday showed US companies hired fewer workers last month than estimated, signaling employment gains may have slowed and adding to anxiety over growth. The data came ahead of Friday’s monthly government payrolls report on US jobs. Hong Kong property developers sank after Goldman Sachs Group Inc. forecast a slide in home prices. Equity markets in Japan, South Korea, Thailand, and Indonesia are closed for holidays.

Global equities have fallen to their lowest level in almost a month amid concern over weak company earnings and lackluster data on manufacturing and employment. Federal Reserve Bank chiefs of Atlanta and San Francisco have highlighted the prospect of an interest-rate increase next month, with Friday’s US payrolls data seen as key to investors’ assessment of the next moves in monetary policy.

Gold Allure

Stan Druckenmiller, the billionaire investor with one of the best long-term track records in money management, said the bull market in stocks has “exhausted itself” and that gold is his largest currency allocation. He averaged annual returns of 30% from 1986 through 2010 at his Duquesne Capital Management.

Hong Kong’s Hang Seng Index lost 0.4% and the Hang Seng China Enterprises Index of mainland firms listed in the city fell 0.8 percent amid concern a pick up in economic growth is faltering. A private index of China’s services industry fell to 51.8 in April from 52.2 in March, Caixin Media and Markit Economics said on Thursday.

New World Development Co. led a slump for developers after Goldman Sachs downgraded Hong Kong property stocks, predicting a 20% drop in home prices. The Shanghai Composite Index climbed 0.2%.

NAB Gains

Australia’s S&P/ASX 200 Index rose 0.2%. National Australia Bank Ltd climbed 2% in Sydney after posting a 6.5% increase in first-half cash profit as it bucked a trend among Australia’s largest lenders by decreasing bad-debt charges and as margins improved for the first time since 2011.

Philip Lowe will replace Glenn Stevens as governor of the Reserve Bank of Australia for a seven-year term on Sept 18. Lowe inherits the post with diminished interest rate ammunition after the central bank eased policy to a record low to cushion the end of a mining investment boom and combat disinflation.

Crown Resorts Ltd, the gaming company of James Packer, rose 4.9%% in Sydney after selling $800 million worth of shares in its Macau venture, raising speculation the billionaire is increasing his firepower for a potential purchase of Australian casino assets. The sale was at a 6 percent premium, Deutsche Bank analyst Mark Wilson wrote in a report.

NOTE: Nova Advisors are ASEAN experts and are located in Bangkok and the US. We have over 30 years experience in helping companies grow market share and sourcing in Southeast Asia.

US President Barack Obama shakes hands with Prime Minister Prayut Chan-o-cha after a group photo at the 10-nation Association of Southeast Asian Nations summit at Sunnylands in Rancho Mirage, California Feb 16. In between are Philippine President Benigno Aquino (second left) and Singapore Prime Minister Lee Hsien Loong. (Reuters photo)

RANCHO MIRAGE, CALIFORNIA — US President Barack Obama announced a package of measures designed to boost Southeast Asian economies, betting that the fast-growing region can be an ever more important trade partner.

The plan will establish three economic offices — in Bangkok, Jakarta and Singapore — “to better coordinate our economic engagement and connect more of our entrepreneurs, investors and businesses with each other.”

The White House sees the 10 nations of the Association of Southeast Asian Nations (Asean) — representatives of which have been meeting with Mr Obama since Monday in California — as an emerging regional counterweight to China’s regional dominance.

Collectively, the countries are the fourth-largest trading partner for the United States.

According to White House figures, “two-way trade in goods and services has tripled since the 1990s, topping US$254 billion in 2014,” supporting around half a million US jobs.

“We have an increasingly deep and broad economic relationship with Asean,” said US ambassador to Asean Nina Hachigian.

While Southeast Asian economies are youthful and fast-growing, many sectors remain the under the control of government or special interests.

But countries like Indonesia are beginning to open up. Its president Joko Widodo recently announced steps to open the economy to foreign investment that were welcomed in Washington.

The new “US-Asean Connect” package will include technical advice on how countries like Indonesia and the Philippines can prepare to join the Trans-Pacific Partnership, a vast Pacific-wide trade deal that is in the process of being ratified.

The US-Asean summit has President Barack Obama at the head of a horseshoe table. Prime Minister Prayut Chan-o-cha is third from left. (Reuters photo)

“We’ve launched a new effort to help all Asean countries understand the key elements of TPP as well as the reforms that could eventually lead to them joining,” Mr Obama said.

Other measures will focus on improving trade ties in the communications and infrastructure sectors among others, streamlining current government programs.

It will also address the power sector, an area where China has been especially active, building dams along the upper Mekong.

A customer selects vegetable at a supermarket in Hangzhou, Zhejiang province yesterday. The consumer price index (CPI) rose 2% in August from a year earlier, due largely to soaring food prices, not an improvement in economic activity. (Reuters photo)

BEIJING: China’s manufacturers slashed prices at the fastest rate in six years in August as commodity prices fell and demand cooled, signalling stubborn deflation risks in the economy and adding to expectations for further stimulus measures.

The producer price index (PPI) fell 5.9% in August from the same period last year, its 42nd consecutive month of decline and the biggest drop since the depths of the global financial crisis in late 2009, data showed yesterday.

The market had expected a decline of 5.5% after a drop of 5.4% in July.

“The change in PPI is very worrying. It could affect corporate profitability, which in turn could affect consumption and the economy,” said Li Huiyong, economist at Shenyin & Wanguo Securities. “We must step up policy support.”

Economists believe that China’s surprise currency devaluation of nearly 2% in mid-August will have little impact on inflation in the near term, in comparison with the effect of sharply lower commodity prices.

The consumer price index (CPI) rose 2% from a year earlier to a one-year high, the National Bureau of Statistics said, but the gain was due largely to soaring food prices, not an improvement in economic activity.

Indeed, non-food inflation remained subdued at 1.1%, unchanged from July.

“The risk for China is still deflation, not inflation. PPI deflation will eventually filter down to affect CPI, and aggregate demand will continue to be weak,” said Kevin Lai, chief economist Asia Ex-Japan at Daiwa Capital Markets Hong Kong Limited, adding that his firm had just cut its 2016 CPI forecast to -0.5% from 0.5%.

“In addition all the capital outflows (due to the slowing economy) will force the PBOC to continue purchasing yuan, which is hugely destructive to the monetary base,” he said.

Continuously falling producer prices are eating into profits at many Chinese firms and raising the relative burden of their debts.

Official and private factory surveys last week also showed manufacturers laid off workers at a faster rate last month as their order books shrank.

The central bank has cut interest rates five times since November and more reductions are expected in coming months, but many economists believe real rates are still too high, discouraging new investment.

Economists at ANZ said further policy easing is needed soon to head off the risk of a vicious cycle of slower growth and deflation.

They expect the People’s Bank of China to cut banks’ reserve requirements (RRR) by another 50 basis points by year-end.

Data earlier this week showed imports tumbled more than expected in August while exports shrank again, pointing to persistently weak demand both at home and abroad.

Other data from China this week — including industrial output and investment on Sunday — are likely to be downbeat, keeping financial markets on edge.

Fears of a China-led global slowdown have grown in recent weeks after a series of grim factory activity surveys.

The government is also still struggling to stabilise the yuan after its surprise devaluation of the currency on Aug 11 and halt a stock market rout that has seen the country’s share indexes plunge 40% since mid-June.

Analysts say weak data over the summer is putting Beijing’s official 7% growth target for this year at risk.

That level would mark China’s weakest expansion in a quarter of a century, but some economists believe current growth levels are already much weaker than official numbers suggest.

The chairman of the National Development and Reform Commission (NDRC) said on Wednesday that China’s economic fundamentals “are healthy while still facing relatively large downward pressure.”

Separately, the Finance Ministry said on Tuesday that it would strengthen fiscal policy, boost infrastructure spending and speed up reforms to support the economy.

Source: Reuters September 11, 2015

TOM’S COMMENTS: If you’re global sourcing out of China, time to renegotiate pricing. If you’re sourcing strategy is mostly China-centric, then move quickly to spread your risks to other Asian countries.

JAKARTA – Indonesian President Joko Widodo on Wednesday unveiled a series of stimulus measures to lift slowing growth in Southeast Asia’s top economy and shore up the country’s plunging currency.

President Joko Widodo unveils a series of stimulus measures at the presidential palace in Jakarta on Sept 9, 2015.

In a televised address, Widodo was joined by key policymakers to announce a broad range of measures including the slashing of red tape to woo investors, moves to bolster the rupiah, and programmes to help the poor.

The president said the stimulus was aimed at providing an “economic jump forward”, and that two other parts of the package would be unveiled in the coming weeks.

Widodo came to power last year pledging to boost the G20 economy but his government has faced criticism for a series of policy flip-flops, sending mixed messages to investors and a failure to get key initiatives off the ground.

In a bid to cut through red tape, the president said Wednesday that adjustments were being made to 89 regulations to simplify doing business and cut “irrelevant regulations which have hampered the competitiveness of national industry”.

Policies announced to help the poor included the provision of cheaper fuel to fishermen, more funding to villages and the strengthening of a programme to provide cheap rice.

Agus Martowardojo, governor of the central bank, Bank Indonesia, announced measures to help the rupiah, including improving the management of foreign exchange flows.

Other steps unveiled in the package included helping exporters with financing and making it easier for frequent foreign visitors to Indonesia to open bank accounts.

Widodo had pledged to kickstart growth by creating new jobs for the young, starting a flurry of infrastructure projects and boosting the manufacturing sector.

But growth has continued to slide, hitting a six-year low of 4.7% in the second quarter, while the rupiah has fallen to a 17-year low in recent months. On Wednesday, the unit was changing hands at 14,250 to the dollar.

Like other emerging markets, Indonesia has also been hit by external factors, such as expectations that the US will soon raise interest rates and China’s devaluation of its currency.

Widodo had already taken some steps to boost confidence in his economic management. Earlier this month, he announced tax breaks for some industries and in August he replaced key economic ministers in a cabinet reshuffle.

TOM’S COMMENTS: Look for similar programs surging through ASEAN and specifically GMS corridor countries. Programs will include populist programs to boost spend and initiatives to hand currency fluctuations. Benchmark goals and forecasts will be rarely provided with the announcements of initiatives.

China announces plans to boost the Belt and Road trade by creating economic corridors and investing nearly $900 billion in countries along the route.

Vice-Premier Zhang Gaoli said the country is mulling six economic corridors with countries along the Belt and Road trade route to better connect Asia and Europe with funding from the Asian Infrastructure Investment Bank and the Silk Road Fund.

Corridors are set to run through China-Mongolia-Russia, New Eurasian Land Bridge, China-Central and West Asia, China-Indo-China Peninsula, China-Pakistan, and Bangladesh-China-India-Myanmar, said Zhang.

Addressing the opening ceremony of the Asia-Europe Meeting (ASEM) Industry Dialogue on Connectivity Chongqing municipality on Wednesday, Zhang said such strong relationships were “a trend of the times and a global concern”.

The China-proposed Belt and Road Initiative on trade and infrastructure networks have been welcomed across Asia and Europe, according to Zhang. Its success is in the interests of all the sides involved, he said.

Meanwhile, China Development Bank, one of the country’s policy banks, said it will invest more than $890 billion into more than 900 projects involving 60 countries, as part of its efforts to bolster the initiative, the 21st Century Business Herald reported on Thursday.

The newspaper cited the bank’s vice-president Li Jiping that over $10 billion has been poured into projects covering coal and gas, mining, electricity, telecommunications, infrastructure, agriculture, and so on.

Zhang underlined that “connectivity” concerns not only physical infrastructure like roads, but also people-to-people exchanges, policy coordination, trade and capital flow, a significant boost to Asia-Europe cooperation.

While highlighting transportation, communication and energy as important areas for connectivity, the vice-premier said the countries should “consolidate the social foundation for connectivity” by ensuring openness in their education, employment and tourism markets.

The two-day event held in Chongqing municipality has gathered government officials and company representatives from the 53 members and international organizations grouped under the ASEM.

The director general of BusinessEurope said in a recent interview with Xinhua that China-EU cooperation can help realize growth potential in China’s digital economy.

Markus J Beyrer, director general of BusinessEurope, an association of enterprises in 33 European countries, said the digital industry is a game changer for the global economy and will have a huge impact on EU competitiveness.

Intelligent, interconnected systems now seamlessly support industrial activities along the entire value chain, he added.

Europe will have to reap the benefits of this huge potential, putting in place a real strategy to digitize all sectors of the economy.

He noted that by 2025, Europe’s manufacturing industry would gain a gross value worth 1.25 trillion euros ($1.36 trillion). However, he warned if Europe fail to turn the digital transformation to their advantage, the potential losses can be up to 600 billion euros by 2025 or over 10 percent of Europe’s industrial base.

Talking about China’s digital economy, Beyrer said China’s Internet industry is growing fast, but until now it has largely been consumer-driven rather than enterprise-driven.

Large e-commerce firms have driven sales and transformed retailing, but small and medium sized enterprises still lag behind in using the Internet for procurement, sales and marketing purposes, he said.

“It is clear that there is a lot of potential for growth in China’s digital economy too, China needs to liberalize its market to encourage new innovations and robust competition would accelerate China’s productivity,” said Beyrer.

Beyrer underlined that European companies have the required expertise and can help China realize its potential by engaging the Chinese market on commercial terms.